Do you know whom you just acquired?
Chances are, if you run a business with a strategic plan that includes inorganic growth goals, you don’t.
At least, not well enough.
Research suggests that it is difficult enough for organizations to truly understand the state of mind of their existing customers and employees, let alone those who have just been welcomed aboard.
The good news, however, is that companies who use a disciplined approach to assessing and improving the way employees interact with customers are beating their competition handily. Recent data from Gallup revealed that a study group of 10 companies who are on the leading edge of this management approach outpaced their peers by 26% in gross margin and 85% in sales growth during a recent one-year period.
Companies can gain a significant competitive advantage by applying similar principles to the way they approach mergers and acquisitions. In order to enhance the probability of increased shareholder returns, businesses with expanding global footprints should take proactive steps to further understand employees and key customers whom they’ve recently acquired. While the due diligence process is designed to provide an acquiring company with a wealth of information about its potential future, organizational leaders must examine the areas that are frequently overlooked in the post-deal stages of an acquisition so that they can cash in on the full potential of M&A activities.
Here are a few thoughts to get you started down the right path:
- How does your newly acquired leadership team think about selecting and positioning employees, managing and motivating them, and accelerating their development?
- How does that differ from your current approach?
- Will the culture of your newly acquired company help or hinder your chances of consistently delivering on your brand promise?
- Do you need to modify or adjust your existing brand promise to the marketplace?
Answering, or even just considering, these questions will help keep you on track and guide some of the important decisions that you make throughout the integration process.
Your New Employees
Since there is so much to accomplish throughout the course of an acquisition, a good place to start with your new employees would be to learn as much about them as possible. You’ll need to gain their trust, and if they see you’ve taken the time to study them, it will accelerate the journey.
Of course, the culture of your newly acquired employees depends on a number of other variables that are more within your span of control than where employees are based. For instance, you need to have a firm grasp on the existing leadership style and management practices of the company you just bought.
Your New Customers
Aligning your troops internally is a necessary first step as you seek to fully understand the perception that your new customers have of your company in the months and years following an acquisition. To get the most out of an acquisition, your teams must capitalize on the synergies that were discussed in the boardroom as the deal was hashed out. Turning ideas into action, though, requires very specific business intelligence at the front lines.
So what should leaders do differently? How can you increase your chances of creating value with your mergers and acquisitions? Outline a plan for getting closer to the people you’ve acquired – both employees and customers. Why? Because companies are vying for a competitive advantage, and improved customer service tends to be the differentiator that beats all others – a differentiator that involves your employees and your customers and the interactions they have with one another each day.
Here are a few next steps for you to consider:
- The Basics – Don’t stop doing the essential blocking and tackling. Continue guiding each of your teams through the appropriate steps before, during, and after a major deal is closed. Ensure that you thoroughly review employee lists and customer lists. Cascade the proper communication to your organization, welcome the new company, and set the tone for the future.
- The Culture – Identify what uniquely defines each set of employees – both legacy and acquired. Learn about the nuances that make your best teams tick, and find out what the managers of those teams do differently. Seek out best practices from your acquired company that you never even knew existed. Make your combined culture about your brand promise, and as a leader, serve as a role model by making every interaction – big or small – meaningful to your people.
- The Market – Talk with sales teams, both legacy and acquired, about the similarities and differences of customers’ needs. Find out how they go to market to serve their customers. For instance if you're selling widgets, figure out the types of problems your widget solves for your customers. If you happen to sell information, be a broker of wisdom like The WordPress Millionaire and develop a trusted advisor relationship with the market you serve.
- The journey - Create a client history map for those key customers who will expect you to know what they’ve been though, especially those who have been loyal to the acquired company for decades.
- The Truth – Obtain candid feedback from your employees and your customers about the health of the relationships that exist internally and externally. Determine what’s needed on an ongoing basis to improve customer service, and pinpoint the areas where action is required to make immediate fixes as well as long-term transformational adjustments.
- The Change – Architect a change plan. Work with your M&A teams to map out the tasks that are currently being performed by each function within your organization when a deal closes, and determine which functions need more long-term assistance (e.g., Human Resources and Sales & Marketing). Define your organization’s current state of understanding when it comes to your acquired employees and customers. Then, clearly lay out a roadmap to chart your desired future state.
As you compete for your share of today’s growth markets, the importance of getting this right is greater than ever before. Thinking carefully about the implications that mergers and acquisitions have on the customer service equation will surely factor into today’s Darwinian principles of business.
Decide today how you’d like to answer the same question 12 months from now: “Do you know whom you just acquired?” Your employees and your customers will appreciate it almost as much as your shareholders.